Financing Your Investment Property
We work with various lenders that finance both domestic and foreign borrowers.
Foreign borrowers can obtain loans of up to 50% of the appraised value.
National borrowers: If you pre-qualify for refinancing by our preferred lender, (a local Philadelphia bank), we can offer you private financing to fund your initial purchase and renovation costs with a 25% down payment of the total (purchase plus renovation). After few months, this short-term loan can be converted to a cash-out refinance by the local Philadelphia bank at prevailing interests rates (4-5%). The bank will refinance you at 75% of the after repair value. In many cases, this allows the borrower to recoup most or all of their down payment, essentially producing a no money down deal. The pre-qualification process takes no longer than 10 minutes. Please watch the video and contact us for more information.
Case Study (Real Example)
6000 Osage St.
Investment Figures:
| Purchase Price | $20,000 |
| Renovation | $44,000 (<3 months) |
| Closing costs | $3,000 |
| TOTAL: | $67,000 |
Return analysis:
| Rental Income | $900 |
| Expenses | |
| Property Management | ($90) |
| Property Taxes | ($70) |
| Insurance | ($65) |
| Vacancy (5%) & maint.(5%) (estimated, from year 2) | ($90) |
| ————————————————————————————————– | |
| Net income | $585/ month |
(10.5% cash on cash ROI)
FINANCED INVESTMENT (Buying After Renovation )
Suitable for: Any national investor who qualifies for a conventional loan and has some cash (>$15,000)
Initial cash: $16,750
LOAN (5.5% fixed 30years)
Property appraised by $67,000
Loan (75%) $50,250
costs: $3,000
Donwpayment: $16,750
Money in the deal $19,750
Return analysis
NET cash flow/month: $585-$223 (loan)= $362 ($4,345/year)
ROI: 22% (cash on cash)
FINANCED INVESTMENT ( Buying before renovation cash and refinance 3 months after tenant is placed )
Suitable for: Any national investor who qualifies for a conventional loan. and has cash (>$70,000)
Initial cash: $67,000
LOAN (5.5% fixed 30years)
Property appraised by $85,000
Loan (75%) $63,750
costs: $3,000
Cash-out: $60,750
Money in the deal $6,250
Return analysis
NET cash flow/month: $585-$345 (loan)= $240 ($2,880/year)
ROI: 46% (cash on cash)
Note 1: A turn-key property, will never appraise for more than selling price but if you buy before renovation, and then refinance, banks will appraise for more, allowing you to leave very little money in the deal and increase ROI up to 40-50%
Note 2: The cash for financed deals, can come from:
-Your savings
-Home Owner Line of Credit
-Hard money Lender
Any finance question?
Disclaimer: ABC is not a mortgage broker or a lender and cannot quote rates or make representations about loan terms. Loan terms are not guaranteed, may vary based on your individual situation and qualifications, and are subject to change daily. Each borrower must get rates and terms quoted directly from a loan officer.
